MIRA INFORM REPORT

Report Date :

08.02.2008

IDENTIFICATION DETAILS

Name :	LAKSHMI MACHINE WORKS LIMITED
Registered Office :	Perianaickenpalayam, Coimbatore – 641020, Tamilnadu
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	14.09.1962
Com. Reg. No.:	463
CIN No.: [Company Identification No.]	L29269TZ1962PLC000463
TAN No.: [Tax Deduction & Collection Account No.]	CMBL03078F
Legal Form :	Public Limited Liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing of wide range of spinning and pre-spinning machinery, weaving machineries, castings, pilot mill, metal cutting including grinding machines, payphone, granite and floriculture.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large

Maximum Credit Limit :	USD 23000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having fine track. Available information indicates high financial responsibility of the company. Trade relations are fair. Fundamentals are strong and healthy. Payments are usually correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions. It can be regarded as a promising business partner in a medium to long run.

LOCATIONS

Registered Office :	Perianaickenpalayam, Coimbatore – 641020, Tamilnadu, India
Tel. No.:	91-422-2692371-379 / 2892371-79 / 6612263 / 6612551
Fax No.:	91-422-2692541 / 542 / 2892541-42
E-Mail :	1. lmw.cbe@rmw.sprintrpg.ems.vsnl.net.in 2. regd.off@lmw.co.in corp.off@lmw.co.in sales@lmw.co.in exports@lmw.co.in supportcentre@lmw.co.in
Website :	http://www.lakshmimach.com
Corporate Office :	34-A, Kamaraj Road, Coimbatore - 641 018
Tel. No.:	91-422-2221680-87
Fax No.:	91-422-2220912
E-Mail :	corp.off@lmw.co.in secretarial@lmw.co.in
Location :
Factory :	TEXTILE MACHINERY DIVISION Unit I Perianaickenpalayam, Coimbatore – 641 020 Unit II Kaniyur, Coimbatore – 641 659 Spindles & Rings Unit SF 113, Annur Road, Arasur, Coimbatore – 641 407 Bearings Unit SIPCOT Industrial Complex, Gummudipoondi - 601 201, Tamilnadu wind mill division Kethanur, Palladam (TK), Coimbatore commercial tool room Sangothipalayam, Coimbatore - 641 407 agro division Naranahalli Village, Doddaballapur (TK), Karnataka MACHINE TOOL DIVISION Arasur, Coimbatore – 641 407. FOUNDRY DIVISION Arasur, Coimbatore – 641 407. G. K. D. INSTITUTE FOR TECHNOLOGICAL RESOURCES Arasur, Coimbatore – 641 407.

DIRECTORS

Name :	Dr. D. Jayavarthanavelu
Designation :	Chairman & Managing Director
Qualification :	Engineering & DS Textiles
Date of Appointment :	3^rd April, 1970
Name :	Mr. M. V. Subbiah
Designation :	Director
Name :	Justice Mr. G. Ramanujam (Retd.)
Designation :	Director
Name :	Justice Mr. S. Natarajan (Retd.)
Designation :	Director
Name :	Mr. S. Pathy
Designation :	Director
Name :	Mr. R. Satagopan
Designation :	Director
Name :	Mr. Basavaraju
Designation :	Director (Nominee of LIC)
Name :	Mr. R. Venkatrangappan
Designation :	Wholetime Director
Qualification :	B.Sc., B.Com.
Previous Employment :	Lakshmi Textile Exporters Limited
Name :	Mr. Sanjay Jayavarthanavelu
Designation :	Wholetime Director
Qualification :	MBA
Date of Appointment :	3^rd June, 1994

KEY EXECUTIVES

Name :	Mr. R. Rajendran
Designation :	Chief Financial Officer
Name :	Mr. K. Duraisami
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.12.2007

Names of Shareholders	No. of Shares	Percentage of Holding
Shareholding of Promoter and Promoter Group
Indian
Individual / HUF	292330	2.36
Bodies Corporate	2835180	22.92
Public Shareholding
Institutions
Mutual Funds/UTI	556928	4.50
Financial Institution/Banks	1666	0.01
Insurance Companies	2214074	17.91
Foreign Institutional Investors	726326	5.87
Non Institutions
Bodies Corporate	1500203	12.13
Individuals
(i) Individual shareholding Nominal share capital up to Rs. 0.100 Million	1408917	11.39
(ii) Individual shareholding Nominal share capital in excess of Rs. 0.100 Million	718954	5.81
Any Other (Specify)
Trusts	10480	0.09
Directors & Their Relatives	4400	0.04
Foreign Nationals	240	0.00
Non Resident Indians	68233	0.55
Overseas Corporate Bodies	150	0.00
Clearing Members	38093	0.31
HUF	361556	2.92
Foreign Corporate Bodies	1631520	13.19
TOTAL	12369250	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing of wide range of spinning and pre-spinning machinery, weaving machineries, castings, pilot mill, metal cutting including grinding machines, payphone, granite and floriculture.

Products :

Item Code No. (ITC Code)	844520
Product Description	Textile Spinning Systems
Item Code No. (ITC Code)	845811
Product Description	Metal Cutting Numerically Controlled Machines
Item Code No. (ITC Code)	844511
Product Description	Spinning Preparatory Machines

Exports :

Countries :

Bangladesh, Botswana, Ghana, Indonesia, Iran, Kenya, Malaysia, Nepal, Nigeria, Philippines, Sri Lanka, Switzerland, Thailand and Turkey

Imports :

Countries :

Denmark, Germany, Japan, Korea, Switzerland, Taiwan and U.S.A.

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Spinning Machinery
Spinning Preparatory Machinery	Nos.	3287	4200	3833
Yarn Making Machinery	Nos.	5084	3300	2433
Accessories & Parts	Nos.	211 lacs	279 lacs	--
Weaving Machinery				--
Weaving Preparatory Machinery	Nos.	211	--	--
Textile packaging Machinery	Tonnes	196	--	--
Pilot Mill	Spindle	3000	3000	--
Metal Cutting Including Grinding Machines	Nos.	900	900	696
Diesel Engines	Nos.	2676	--	--
Cuttings	Tonnes	--	--	34775.98

GENERAL INFORMATION

No. of Employees :	3,858
Bankers :	v Indian Bank, Coimbatore. v Bank of Baroda, Coimbatore. v Indian Overseas Bank, Coimbatore. v Citibank N.V., Coimbatore. v Bank of Nova Scotia, Coimbatore. v HDFC Bank Limited, Coimbatore. v ICICI Bank Limited, Coimbatore. v IDBI Bank Limited v Standard Chartered Bank

Banking Relations :	Satisfactory
Auditors :
Name :	v M. S. Jagannathan and Visvanathan Chartered Accountants Coimbatore v Subbachar and Srinivasan Chartered Accountants Coimbatore
Memberships :	Confederation of Indian Industry
Collaborators :	H. Hergeth GmbH, Germany
Joint Venture :	Rieter LMW Machinery Limited
Associates/Subsidiaries :	Adwaith Lakshmi Industries Limited Adwaith Textiles Limited Annur Satya Textile Limited Eshann Enterprises Limited Harshni Textiles Limited Kanakadhara Textiles Private Limited Lakshmi Cargo Company Limited Lakshmi Electrical Drives Limited Lakshmi Technology & Engineering Industries Limited Lakshmi Ring Travellers (Cbe) Limited Lakshmi Electrical Control Systems Limited Lakshmi Precision Tools Limited Super Sales India Limited Starline Travels Limited Titan Paints & Chemicals Limited Tube Investments of India Limited The Lakshmi Mills Company Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
25,000,000	Equity Shares	Rs.10/- each	Rs. 250.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
12,369,250	Equity Shares	Rs.10/- each	Rs. 123.692 millions

Out of the above :

• 230,010 Shares are allotted as fully paid up, pursuant to a contract without payment being received in cash.
• 9,651,620 Shares are allotted as fully paid-up by way of bonus shares by capitalisation of General Reserve.
• 210 Shares are allotted as fully paid-up on account of Merger of India Precision Bearing Mfrs. Limited,
• with the Company.
• 177,520 Shares are allotted as fully paid-up on account of Merger of Textool Company Limited with the Company

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		123.693	123.693	123.700
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		5679.497	4263.715	3238.500
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		5803.190	4387.408	3362.200
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		0.000	0.000	0.000
DEFERRED TAX LIABILITIES		305.200	165.653	0.000
TOTAL		6108.390	4553.061	3362.200
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		3853.947	2463.140	1605.500
Capital work-in-progress		10.331	0.000	0.000
INVESTMENT		1021.581	1015.263	662.200
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1630.684	1412.490	1471.400
	Sundry Debtors	406.651	622.452	602.400
	Cash & Bank Balances	6126.264	3911.783	971.700
	Other Current Assets	382.388	46.623	0.000
	Loans & Advances	2780.715	1375.666	1334.000
Total Current Assets		11326.702	7369.014	4379.500
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	8893.550	5706.299	2859.500
	Provisions	1210.621	594.099	461.500
Total Current Liabilities		10104.171	6300.398	3321.000
Net Current Assets		1222.531	1068.616	1058.500
MISCELLANEOUS EXPENSES		0.000	6.042	36.000
TOTAL		6108.390	4553.061	3362.200

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		18535.815	13020.651	11229.700
Other Income		881.398	425.283	329.300
Total Income		19417.213	13445.934	11559.000
Profit/(Loss) Before Tax		3085.998	1879.154	1108.900
Provision for Taxation		1024.022	430.826	375.500
Profit/(Loss) After Tax		2061.976	1448.328	733.400
Earnings in Foreign Currency :
Total Earnings		822.817	1325.451	NA
Imports :
	Raw Materials	337.565	158.217	NA
	Stores & Spares	1606.783	1050.883	NA
	Capital Goods	1111.360	522.388	NA
Total Imports		3055.708	1731.488	NA
Expenditures :
	Operating Expenses	12860.706	8707.966
	Employee Cost	1291.994	1085.184	10450.100
	Administrative and Selling Expenses	1490.997	1214.875
	Depreciation	687.518	558.755
Total Expenditure		16331.215	11566.780	10450.100

QUARTERLY RESULTS

PARTICULARS	30.06.2007	30.09.2007	31.12.2007
Type	1^st Quarter	2^nd Quarter	3^rd Quarter
Sales Turnover	4832.200	5827.400	5352.100
Other Income	174.000	235.800	172.300
Total Income	5006.200	6063.200	5524.400
Total Expenditure	4031.300	4677.100	4303.800
Operating Profit	974.900	1386.100	1220.600
Interest	0.000	00.000	0.000
Gross Profit	974.900	1386.100	1220.600
Depreciation	210.000	264.600	327.600
Tax	202.300	395.600	308.500
Reported PAT	492.600	745.900	584.500

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt-Equity Ratio	0.00	0.00	0.08
Long Term Debt-Equity Ratio	0.00	0.00	0.08
Current Ratio	1.11	1.20	1.35
TURNOVER RATIOS
Fixed Assets	2.36	1.93	1.53
Inventory	13.98	10.24	8.62
Debtors	41.35	24.12	23.61
Interest Cover Ratio	84.63	55.47	14.67
Operating Profit Margin(%)	17.91	16.74	13.83
Profit Before Interest And Tax Margin(%)	14.68	12.96	10.60
Cash Profit Margin(%)	12.93	13.59	9.77
Adjusted Net Profit Margin(%)	9.69	9.81	6.53
Return On Capital Employed(%)	61.33	49.66	32.77
Return On Net Worth(%)	40.47	37.38	21.60

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject belonging to the G V Naidu (Laxmi) group, was incorporated in 1962. LMW produces a complete range of state-of-the-art textile machinery in collaboration with Reiters, Switzerland, and high precision CNC machine tools in collaboration with Mori Seiki, Japan. The company's collaboration agreement with Rieter Machine works Limited, Switzerland expired in 1999 hence Rieter has withdrawn its nominees on the board of LMWL but it still holds a 13 percent share in the capital of LMW. 

The Company has its presence in Textile Machinery Division, Machine Tool Division and Foundry Division. LMW has also diversified into the iron and steel, telecom, granite and agro sectors.  

Company’s associate companies include Pugoda Textiles Lanka and Southern Iron & Steel. LMW's subsidiaries are LMW Investments, Dee Jay Leasing and LMW Management Services. During April, 2002 Jay Leasing Company Limited and LMW Investments Limited, the wholly subsidiary of the LMW were acquired by the company. 

Indian Precision Bearing Mfrs. Limited, a BIFR company manufacturing textile machinery components, was merged with the company during 1997-98. During 2003-November,Textool Company Limited(TCL) has been amalgamated with LMW and as per the scheme of Amalgamation approved by BIFR,One Equity Share of Rs.100 each of LMW will be issued for every 200 Equity Shares of Rs.10 each held in TCL or Rs.10 payable in cash for every equity share held of Rs.10 each held in TCL. 

Southern Iron and Steel Company Limited (SISCOL) was promoted in 1994 by the company with Tamil Nadu Industrial Development Corporation Limited (TIDCO) in Associate Sector for the Manufacture of Foundry Grade Pig Iron, Alloy Steel and Mild Steel. During the year the company has disposed off the Equity Investments in SISCOL to the promoters of Jindal Iron & Steel Company Limited  

In 1997-98, it introduced a number of new products like, the high-speed CNC machines in the Pilatus range, high-power CNC lathe in the Rigi range, vertical machining centres in the Kodi range, Ooty 40, which is the all-new horizontal machining centre and a mould- making machine, Kodi Mould 50. 

To consolidate its manufacturing activities the company has shifted its Cots and Aprons unit from Eloor to Unit II at Kaniyur. The Flyer Unit was also shifted from Muthugoundepudur to Unit I. The company has leased its Powder Paint unit as it is not the core business activity. The company forayed into foreign markets by exporting Steel Billets to Thailand and Sri Lanka. 

During 2005-2006, Jeetstex Engineering Limited (JEL), Coimbatore a sick company engaged in the manufacture of textile machinery and castings was acquired by the company during November, 2005 and has become a wholly owned subsidiary of the company. The companies shareholders at EGM approved the merger of JEL with the company. 

The company enhanced its capacity of Spinning preparatory machinery and Yarn making machinery from 3112 Nos to 4002 Nos. and 3000 Nos to 3300 Nos.

BUSINESS

Subject is engaged in manufacturing of wide range of spinning and pre-spinning machinery, weaving machineries, castings, pilot mill, metal cutting including grinding machines, payphone, granite and floriculture.

Subject is the largest domestic textile machinery manufacturer with a 37% stake in domestic production. It has a number of group companies, which together manufacture the entire range of spinning, weaving and processing machinery.

The company has also diversified into the iron and steel, telecom, granite and agro sectors. Floriculture is another thrust area where it has tied up with Flodac, a Dutch firm for orchids and flowers export and has acquired land at Dodaballapur.

The company has been accredited with ISO 9001 and ISO 9002 Certification.

Operations 

During the year under review, the Company achieved a turnover of Rs. 18535.814 Millions as against the last year's Rs. 13020.651 Millions, and recorded a net profit of Rs. 3085.997 Millions, up from Rs. 1879.154 Millions in 2005-06, before taxation. The unprecedented demand for all the products manufactured by the Company has enabled it to achieve a topline growth of 42% over the previous year. 

Textile Machinery Division 

The Indian textile industry maintained an upbeat mood throughout, thanks to the rising demand from the West following the abolition of the quota regime. The world textile and clothing market is expected to shoot past US$ 600 billion by 2010. The Indian textile sector is set to meet the challenges with high-end technology and intensified focus on quality standards. With extensive modernisation initiatives and forward integration with large-scale integrated textile facilities, the Indian textile sector is fast transforming itself into a modern industrial sector with world-class quality standards.  

To encourage the sector, the Government of India has come up with several policy announcements such as setting up of 26 textile parks with an investment of Rs.131260 Millions and also extend the Technology Upgradation Fund (TUF) scheme for the next five years. 

The upswing in the textile sector has brought good times for the Company with a surge in orders for machines. The Company, as a complete spinning solutions provider, has exceeded customers expectations with constant innovation by improving product lines and services. The Company supplied 2.33 million spindles during 2006-07. This achievement, even in the face of rising competition, can be attributed to its reasonable pricing policy and ability to supply technologically high-end and cost-competitive machines.

The Company reduced the waiting time for the machines by constant investment in upgrading the mother machines and production facilities. 

During the year under review, the textile machinery division of the Company achieved a turnover of Rs. 16550.486 Millions, up from last year's Rs. 11342.319 Millions, recording a 46% rise. 

Machine Tool Division 

The machine tool industry in India is highly competitive and about 72% of the total demand is met by imports. The demand for high-tech CNC machine tool is rising sharply due to continuous growth of the capital goods sector. Thanks to the user-friendliness and good after-sales service, the CNC machine tools manufactured by the Company command a premium position in the market. As part of this division's initiative to introduce new products, five variants of turning centres and one variant of the vertical machining centre were commercialised during 2006-07. These new variants are well accepted in the market and are expected to attract good demand. 

The division touched a turnover of Rs. 1289.040 Millions in 2006-07 from last year's Rs.1059.862 Millions, registering a growth of 22%. 

Foundry Division 

Heavy castings manufactured by this division are well received in the international market. This division exports castings to OE manufacturers in the US, Canada, Germany, Spain and Finland. In the domestic front, the Company supplies castings to leading manufacturers of windmills, engine parts and turbo chargers. 

This division achieved a turnover of Rs. 696.289 Millions as against the previous year's Rs. 618.500 Millions. 

During this year, exports accounted for Rs. 378.845 Millions (previous year Rs. 397.030 Millions) which constitutes 54% of this division's turnover. 

Windmill Division 

The Company is constantly investing towards utilisation of non-conventional energy resources. The Company has installed 14 high-capacity wind energy generators with a total capacity of 21.50 MW. During the year under review, this division generated 457 lakh units compared to 317 lakh units generated last year. The wind power generated and supplied to the TNEB is adjusted against the power drawn from the grid to reduce the Company's energy cost. 

Exports 

Concentration of the Company on meeting the increasing domestic demand for textile machinery had its impact on the export front. During the year under review, the Company achieved an export turnover as shown below: 

1. Textile machinery: Rs 443.972 Millions (previous year Rs. 928.420 Millions) 
2. Castings: Rs 378.845 Millions (previous year Rs. 397.030 Millions) 

Total: Rs 822.817 Millions (previous year Rs. 1325.450 Millions) 

However, enhanced efforts will focus a sustained growth in exports across all the products. 

Research and Development 

The research and development wing at the Company is recognised by the government. The department is responding to the needs of the customer by developing new machines and improving the performance of existing ones.

Research is being carried out to achieve cost reduction and ensure value additions. The department also has arrangements made with leading institutions and experts in this field for obtaining the latest technology. 

Awards 

The Company received the `Star Performer in Machinery' (excluding electrical) and `Mechanical Appliances Award' for 2004-05 from the Engineering Export Promotion Council. The Company was also bestowed with the `Apex Export Award' for 2005-06 for the highest export of textile machinery from the Federation of Indian Textile Engineering Industry. It is also the recipient of the `Gargi Huttens- Albertus Green Foundry Award' for 2006 from the Institute of Indian Foundrymen. 

The company is in trade terms with:

Ø Associated Autotex Ancillaries Private Limited

Ø Beekay Industries

Ø Bhavani Enterprises

Ø Craftsman Automation Private Limited

Ø Hi Tech Plastics

Ø Kentex Control Systems

Ø Mikrosen Control Devices Private Limited

Ø Micro Instruments Limited

Ø Plastimerzs

Ø Plasto Plast

Ø Precimetcut Toolings Private Limited

Ø Sangeeth Machine Works

Ø Standard Hard Chrome Works

Ø Emtycee Tubes & Steels Private Limited

Ø EPMP Fibre Industries

Ø Moldwell Products

Ø Sri Narayana Electro Plating Works

Ø Sri Lanka Lakshmi Narayana Plastics

Ø Sri Balaji Industries

Ø Precision Engineering Products

FIXED ASSETS

• Land
• Buildings
• Machinery
• Furniture & Equipments
• Vehicles

AS PER WEBSITE

Profile

Subject founded in the year 1962, is today a global player and one among the three manufacturers of the entire range of Textile Machinery.

History stands as a documented proof of LMW's Corporate and Financial success reflecting phenomenal growth since first year of operations. LMW has 60% market share in the domestic Textile Spinning Machinery Industry.

Subject diversified into CNC Machine Tools and is a brand leader in manufacturing customized products. LMW Foundry makes Precision Castings for industries the world over. The only company in Asia outside Europe to manufacture OE products for Mikron of Switzerland.

Subject’s Global presence has grown over the years, with a market presence not only in developing countries, but also in Europe. LMW has won the Top Export Award in textile machine exports for the past seven years.

Quality Policy

To establish global presence in spinning systems by providing Quality services and “state of the art” machinery that enhance value and customer satisfaction through company-wide efforts in continual improvement of People, Systems, Processes, Technology and Practices.

Environmental Policy

Subject is committed to the protection of environment and conservation on of natural resources, as a “Service to the Future Generations”.

Subject shall strive to achieve Environmental Excellence through:

1. Compliance with applicable legislative and other requirements and go beyond compliance to good practices on environmental management
2. Periodic reviews of its environmental performance and minimizing the environmental impacts, while achieving its business objectives
3. Protection of air, water, land and biodiversity and engaging with the community and business associates on environmental issues of mutual interest
4. Waste minimization, energy conservation and recycle and reuse of resources like water and sand

Provision of management tools, awareness and training to employees for continual improvement in its overall environmental performance

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.39.48
UK Pound	1	Rs.77.44
Euro	1	Rs.57.75

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		72

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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